Drinks Americas defaults on $4 million note, $325,000 convertible note

Company also violates license agreement; gets termination notice

By Susanna Moon

Chicago, Jan. 18 - Drinks Americas Holdings, Inc. has received a notice of default on its $4 million non-interest bearing debenture and its $325,000 convertible debenture due Jan. 15, 2013, both issued by private placement, according to an 8-K file Thursday with the Securities and Exchange Commission.

The company said it breached a forbearance agreement under its non-interest bearing when it was unable to pay the final payment for $408,000 plus accrued interest by Jan. 1, 2013, or within the five-day cure period.

As a result, on Jan. 15, the investor delivered a notice of default terminating the forbearance agreement and requesting partial repayment of the note balance by release of 400,000 shares of the company's stock held in escrow.

The investor also demanded immediate and accelerated payment of all amounts due under the note equal to $2,149,888.

Oct. 15, 2012 debenture

On Oct. 15, 2012, the company sold a $325,000 convertible debenture, with proceeds of $250,000 and an original issue discount of $75,000.

The convertible note bears a 0% interest rate and an 18% default interest rate.

On Jan. 15, the company received a letter of default for the nonpayment of the $325,000 due to the holder at maturity. The noteholder declared the company's default and demanded the release of the pledge shares under the security agreement.

Other issues

On Dec. 10, Drinks Americas received a letter from Worldwide Beverage Imports, LLC demanding that the company immediately pay all amounts due under a license agreement dated June 27, 2011.

If the company fails to cure a violation of a material provision of the license agreement within 30 days after written notice of the breach, the license agreement may be terminated.

The company was unable to pay all past due amounts owed to Worldwide Beverage and, on Jan. 10, the company received a notice terminating the license agreement.

Located in Wilton, Conn., Drinks Americas distributes alcoholic and non-alcoholic beverages.

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